To pay upward of seven figures to a new portfolio strategist, the county retirement system had to get creative.

The agency's board members decided he could not be an employee or supervise staff because salary rules do not permit county employees to be paid that much money.

They decided to make him an independent contractor, unlike his predecessor, who was the agency's chief investment officer.

The board's pick for the job was Lee Partridge, outgoing deputy chief investment officer for the Teachers Retirement System of Texas. He formed Integrity Capital, a firm whose first and only client so far is the San Diego County Employees Retirement Association.

Contractors are not supposed to supervise public employees. The news release announcing Partridge's hiring said, “Partridge will accomplish all the tasks of an internal CIO with the exception of the supervision of SDCERA's investment staff.”

Even so, Partridge has sent a memo to the investment staff telling them what their jobs will be and what he will be asking from them.

“I will be asking a lot from you in the months to come to ensure that we take full advantage of this window in time where we can reset the rules of engagement for SDCERA and become a model investment team for the world to see,” he told the investment staff.

The two-page memo says he plans to meet with each staff member. It outlines his family life, leadership philosophy and management style.

“From a leadership perspective, I believe it's critically important to be the right person first then to find the right people second. . . . Your job will be to make sure we implement well and identify economic warning signals that indicate when our strategy isn't working.”

Retirement board Chairman Douglas Rose said he was not concerned about the language Partridge chose for his introduction to the staff.

“He's not out there on an island,” Rose said. “The staff is going to implement the policy that's approved by the board and recommended by Mr. Partridge.”

Retirement board member Dianne Jacob, who is chairwoman of the county Board of Supervisors, said the letter raises questions about how Partridge perceives his job.

“I am concerned,” said Jacob, one of three board members to vote against awarding the chief investment officer's job to an independent contractor.

“I'll be watching it very closely,” she said. “There's a clear distinction between the roles and responsibilities of a consultant versus an in-house CIO in overseeing the staff.”

Partridge, who was hired Sept. 3 and begins Oct. 1, won the job after addressing the board during a January retreat.

He will receive an immediate retainer of almost $350,000, initial advisory fees of $535,500 and incentives that could double that in his first year. Former chief investment officer David Deutsch, who was paid $209,000 a year, was forced out in March after the fund lost more than $2 billion.

The incoming portfolio strategist will manage a fund worth more than $6.3 billion. He will earn more than the investment managers for the $181 billion state employees pension fund and the $118 billion state teachers fund.

Partridge did not return calls seeking comment about the letter he sent to the investment team. In an earlier interview, he said he wants to add additional clients to his consultancy once he sets up shop in San Diego.

Retirement board members said they need to pay top salaries to attract the best performers, although the Texas teachers' fund did not outperform the county retirement fund during the first six months of this year.

Brian White, the county retirement system's chief executive, said he was not troubled by the Partridge memo.

“There has to be collaboration amongst the team, and this was an effort to introduce himself and begin that team framework,” White said. “He has to lead the effort for our portfolio. That's what a portfolio strategist would be.”